Uncle Sam Wants to Tax You…By the Mile

In the US there is always the need for infrastructure upgrades and maintenance. Unfortunately, funds are short these days. So, the Congressional Budget Office (CBO) has floated an idea for a new tax to raise funds. What’s the new tax? Simple. Drivers would get taxed for every mile they drive:

The report discussed the proposal in great detail, including the development of technology that would allow total vehicle miles traveled (VMT) to be tracked, reported and taxed, as well as the pros and cons of mandating the installation of this technology in all vehicles.

CBO’s report stressed it was making no recommendations but seemed to support a VMT tax as a more accurate way of having drivers pay for the costs of highway maintenance. The report said miles driven is a larger factor in highway repairs than fuel consumption and suggested that having drivers pay for the real costs of highways “would involve imposing a combination of fuel taxes and per-mile charges.”

On the one hand, funds have to be raised somehow, and this may be a viable option. However, it also would penalize folks who got more fuel efficient vehicles (less gas purchased at the pump means less gas tax revenue). Also, for folks like me, who are in sales, we would bear a disproportionate share of the tax bill.